Household and business power prices could rise if artificial intelligence (AI) data centres on Australia’s end up being powered by coal or gas generation, a federal assistant minister has said.

Cabinet Secretary and Assistant Minister for Science, Technology and the Digital Economy Andrew Charlton spoke to The Conversation’s politics podcast on Wednesday afternoon – before the details of a national agreement on AI emerged from a National Cabinet meeting between the prime minister and state and territory leaders.

During the interview, Charlton defended his government’s push for national agreement that new data centres be powered by new renewable energy projects, backed by gas, warning that the alternative would “push up the price” of power.

Look, I’m not agnostic to the outcome for Australians. I want to make sure that Australian households do not face higher power prices because of data centres. And if we are allowing data centres to use power from, for example, coal-fired generation, then they are going to be competing for that existing power from that source with households and businesses. That will push up the price. If we allow data centres to use gas from the East Coast Reservation, for example, then they will be drawing gas that would otherwise be used by households and businesses. So the problem with that proposal is if we allow the data centres to draw on finite sources of energy, they will inevitably put upward pressure on the price of those finite sources. However, if we require the data centres to bring new incremental energy, which is renewable energy, additional to what we already have, then they won’t push up prices for Australian consumers.

Look, I’m not agnostic to the outcome for Australians. I want to make sure that Australian households do not face higher power prices because of data centres. And if we are allowing data centres to use power from, for example, coal-fired generation, then they are going to be competing for that existing power from that source with households and businesses. That will push up the price.

If we allow data centres to use gas from the East Coast Reservation, for example, then they will be drawing gas that would otherwise be used by households and businesses. So the problem with that proposal is if we allow the data centres to draw on finite sources of energy, they will inevitably put upward pressure on the price of those finite sources.

However, if we require the data centres to bring new incremental energy, which is renewable energy, additional to what we already have, then they won’t push up prices for Australian consumers.

But Wednesday’s National Cabinet meeting ended with Queensland and the Northern Territory winning agreement that they could power their data centres with coal........

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